In recent weeks, the global carbon black industry has sent mixed signals, especially in terms of pricing and future supply and demand balance.
A recurring theme in the six-month performance of major global carbon black suppliers is that despite sales being flat or declining compared to the same period last year, revenue and profits are still growing.
The Donghai Carbon Black department in Japan saw a 15% year-on-year increase in sales in the first half of the year, and its operating profit more than doubled, although tire sales remained at the same level as the previous year.
Donghai pointed out that improving productivity and shifting environmental investment costs, especially in North America, can help drive up sales and operating profits.
Cabot's reinforced materials department reported that due to the weak replacement tire market, revenue decreased by 14.5% and sales decreased by 8%, but its third quarter revenue increased by 17%.
Its sales in Europe, the Middle East, and Africa showed the largest year-on-year decline of 12%, followed by the Americas, with a decrease of 10%, and Asia, with a decrease of 5%.
Continuing this model, Orilon's rubber carbon black business revenue increased significantly year on year, mainly due to the rise in contract prices.
However, in the second quarter of this year, Oleron's carbon black sales decreased by 14%, while sales decreased by more than 9% year-on-year. The decrease in sales is mainly due to destocking and delays in Europe, the Middle East, and Africa, as well as in the Americas.
In terms of the upcoming situation, despite weak market demand, major carbon black suppliers are still optimistic about profitability and pricing prospects for at least the rest of this year.
With the fundamentals of the European and US markets unchanged, Cabot is expected to increase the pricing of carbon black for the 2024 contract year.
Sean Keohane, President and CEO of Cabot, said, "We have a certain proportion of our business signed multi-year agreements, and the price increases the next year. These price increases are the benchmark for our remaining contracts in 2024 and should truly determine the level of price increases
One factor is the uncertainty surrounding the potential EU restrictions on Russia's export of carbon black to Europe in June 2024.
In this regard, Cabot leader Keohane commented, "The supply situation is still very important for customers, and I believe obtaining supply reliability is crucial for them
However, others have raised different views on how the carbon black market will develop in the coming months.
A commentator commented that the global market is declining and will not recover in 2024. So, let's remain vigilant and avoid unnecessary panic about supply.
Another view on the potential impact of the new EU sanctions on Russia is that all major distributors of Russian carbon black have already filled their inventory within Europe to meet demand for 2024 and 2025.
Others say that external supply is sufficient to meet European demand, especially as overseas carbon black producers are expanding their production capacity. Currently, due to reduced shipping costs, imports are very attractive.
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